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Liquidation
Liquidation
Liquidation is the formal process of winding up a company by selling its assets to repay creditors. This process can be initiated voluntarily by the directors (as in Creditors Voluntary Liquidation (CVL) or involuntarily through a court order Compulsory Liquidation. Liquidation typically results in the company ceasing operations and being removed from the Companies House register.
When to Consider Liquidation:
How RTI Can Assist:
At RTI, we provide expert support for companies facing liquidation. Our l compliance with legal requirements and protecting your interests as a director. We manage every aspect of liquidation, from asset valuation and sale to creditor repayment, ensuring a smooth and structured closure.
FAQ
Can I keep my accountant if I am closing my company or do I need a new one?
It’s your choice, but if your accountant has given you good service, why change?
Do I need to pay my accountant for the accounts to be brought up to date before closing ?
No, we make a request for the last set of filed accounts and as part of our process we run a “deficiency account” which is all that is required.
Do I need a new Bank account ?
Yes, the new company will be separate from the old company, and will need its own bank account, but a new company can be formed by filling in a 5 minute application online and there is the ability to open a bank as part of the formation
Do I need to go to Court to start a Liquidation ?
No, the Court does not need to be involved.
HMRC / Debt Collectors / Bailiff’s chasing the company, will I have to contact them?
No. If you are under pressure before formally entering liquidation, we can take authority to contact chasing creditors on your behalf. Formal circulars are sent when entering liquidation, but we remove all stresses from the Director as part of the process.
Will my credit rating be affected?
No. Entering liquidation is not linked to your personal credit file.
Do I have to attend a meeting and sit in front of my creditors to be asked questions from them ?
No, the process changed some years ago and creditors are written to and given financial information without the need for a meeting.
As a liquidator, Is there an investigation ?
Yes, a Liquidator is obligated to conduct an investigation of why the company failed, but in the majority of cases this does not result in any actions being taken against the director.
How quickly can the company be liquidated ?
A company can be put into Liquidation in 3-4 weeks, after you provide all of the information needed for creditors, and pay the agreed fee. The Liquidation can be completed in as little as 6-7 months.
Do I still need to complete accounts and forms for Companies House, or complete company tax returns after the Liquidation has started ?
No, the Liquidator takes over all of those responsibilities.
What about the assets of the closing company, who gets those ?
The Liquidator will take control of all remaining assets and sell these if the director has no interest in purchasing these. In the case of Book debts, these are collected in by the Liquidator. These monies will be paid to creditors after the Liquidator takes an agreed fee.
Who pays the costs of putting the company into Liquidation ?
If the company does not have the cash at bank to cover those costs, the Director will need to pay the agreed fee on its behalf. In almost all cases, the cost of liquidation is far less than the outstanding debts held by the company.
Unlike Dissolution, which is used for solvent companies with no debts, Liquidation is required when a company is insolvent and cannot repay its creditors. If your company has outstanding liabilities but there’s still a possibility of recovery, you may want to consider a Company Voluntary Arrangement (CVA) instead. For more information on restructuring options, visit our CVA page
Pages related to Company Liquidation
CVA Company Voluntary Arrangement
Creditors Voluntary liquidation (CVL)